So the gap between government revenues and spending has now closed to the point where the majority of it is accounted for by interest payments on accumulated debt?

That's good news.

It means that all of the other elements which made up the deficit are now either eliminated or under control.

I think the time for reining in the deficit by imposing cuts at a greater ratio than tax increases is over.

The bulk of the remaining budget adjustments necessary to close the deficit should be concentrated on increases on taxation targeted at the wealthiest segments of the population, those whose share of national wealth has actually increased since 2008.

That's the cost they are admitting to and plays with the whole "the bank debt is not the problem" spin that various sections have been spouting the last few years.

This is based on 41 billion of debt being attributable to bank debt but the cost of the bail out was 64.1 billion so it is like the other 23.1 billion was free money that has not no cost or loss of income to the state.

A significant amount of the bank debt has been recovered. BOI has bought back shares from the govt, aib and tsb have paid money to govt, Nama has paid money to govt. WE only pay interest on the outstanding balance.

The interest is not destroyed. The surplus the Central Bank makes on the interest it receives will be channeled back to the government. When the Central Bank sells the bonds it will use the money received to "repay" the money created in the first place. The money paid by the government (the interest) will not be destroyed). The money paid by investors (capital to buy the bonds) will be destroyed.

The interest is not destroyed. The surplus the Central Bank makes on the interest it receives will be channeled back to the government. When the Central Bank sells the bonds it will use the money received to "repay" the money created in the first place. The money paid by the government (the interest) will not be destroyed). The money paid by investors (capital to buy the bonds) will be destroyed.

Yeah, what I was getting at was that under the current arrangement the interest seems not to be destroyed but is recycled, whereas when these bonds are sold to the market, the interest will obviously be paid to the bondholders, thus leading to an actual cost to the exchequer every year. Is my understanding correct?

Yeah, what I was getting at was that under the current arrangement the interest seems not to be destroyed but is recycled, whereas when these bonds are sold to the market, the interest will obviously be paid to the bondholders, thus leading to an actual cost to the exchequer every year. Is my understanding correct?

About Politics.ie

Politics.ie is one of Ireland's leading politics and current affairs discussion websites with more than 600,000 visitors a month. Founded in 2003, Politics.ie has one of the most engaged, respected and influential politics and current affairs communities.